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Abalone Council Australia has been asked to explain how the figure of 8 to 1 return on investment was calculated.

The Consumer Education and Promotion (CEP) Program is focused on increasing the price that the consumer pays for our abalone products.  We expect that wild catch abalone quota will not be increasing anytime soon so increasing consumer demand via education and promotion is critical to the future profitability of our industry.

Where did we get the proposed figure of 8 to 1 return on investment?

In preparing the Levy Investment Proposal we looked at how other industries collect and use their levies and what their historical return on investment (ROI) has been.  In particular, the AWA Team focussed on export focussed agribusiness sectors that target Asian markets. Ewan Colquhoun, an independent business investment advisor, makes some comments about how other industries invest in this short video.

Here are some key findings about the experiences of other industries:

Meat and Livestock Australia

Meat and Livestock Australia manages a number of marketing programs on behalf of their members (beef, lamb and goat meat producers).  The last impact review was released in 2016.  Key findings include

  • The domestic beef marketing program delivered a small benefit cost with a return of $1.10 for every $1
  • The domestic lamb marketing program delivered $4.10 for every $1
  • The live exports program provided an ROI of $14.50 for every $1
  • The beef export marketing program achieved $6.70 for every $1
  • The market access program provided a return to producers of $24 for every $1 invested.
  • The market intelligence service provided a return to producers of $7.90 for every $1 invested

Source: MLA Levy Case Study

Australian Prawns

Photo Source: https://www.australianprawns.com.au/

Love Australian Prawns is a collaborative venture between Australian wild-caught and farmed prawn producers.  Their objective was to increase sales (volume) without crashing the market price.  In 2017 the University of Sunshine Coast and Brand Council evaluated the Love Australian Prawns campaign. They found a significant increase in consumer awareness of and demand for Australian prawns, an increase in demand of 38%.  In terms of prices, the report found on average, 20% price increases (across medium to large grades) between 2014, start of the LAP campaign, and now. Some fisheries reported a 20% price increase for larger grades in the 2016/17 year alone, despite having more supply than in past years

Norwegian Seafood

For quota managed fisheries it not about increasing volume of sales it is about increasing prices.  The Norwegian Seafood Council (NSC) is renowned for their whole of industry collaborative consumer education and promotion programs.  They are very active in China and Hong Kong.  In a recent study  looking at the ROI they found that the investment had returned between 5.9 and 9.2 to 1. In what is a very competitive global market (high volumes and many competitors), the NSC programs increased export revenues back to the industry of between 7.1% and almost 10% additional industry profits.

There are many more examples both in Australia and overseas demonstrating that whole of industry collaborative consumer education and promotion programs work.

Five-year trial in five markets

Abalone Council Australia is proposing that we try implementing the proposed CEP Program in our five key markets for five years.  Then we will have another vote to decide whether to continue or not.  Find out more on the website www.abalonepal.com

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